Bwin.Party urges investors to reject activist's board proposals

LONDON, April 25 (Reuters) - Online gambling company Bwin.Party on Friday urged its shareholders to vote against a proposal from American activist investor Jason Ader to elect four new directors, saying it would make the board too large and hamper decision making.

Ader, whose asset management firm SpringOwl is Bwin's fourth-largest shareholder, said last week that the addition of the new executive directors would tackle what he describes as a continuing decline in the business, bringing significant expertise in online gaming, technology and U.S. banking systems.

Activist investors push for change at firms they believe are undervalued and can provide better shareholder returns via a change in strategy or management. Ader, an ex-Wall Street gaming analyst, battled with U.S slot-machine maker International Game Technology last year, winning a board seat for his firm.

Ahead of its annual meeting on May 22, Bwin said it does not have sufficient information or time to review the suitability of each candidate, and believed it would not be in the interest of the company and investors for a shareholder with a stake of 5.25 percent to nominate so many directors onto the board.

It added that the addition of four new directors would increase the size of the board to 13 members, a number the company has already come down from after it was deemed too large, costly and unhelpful to the decision-making forum.

Bwin said SpringOwl's push for four new members had not been supported by any constructive views on how to improve the business and that it should exercise its existing right to nominate an individual appointment to the board.

Last month Bwin posted a 35 percent fall in full-year core earnings to 108 million euros ($149.25 million) due to falling revenue, increased gaming taxes in Germany and start-up costs in New Jersey.

According to Reuters data, Bwin is trading at 17.4 times expected earnings over the next 12 months, versus 18.1 times for rivals 888 and 21.3 times for Betfair.

Shares in Bwin were trading at 127.5 pence at 0825 GMT, down around 1.5 percent on a year ago versus a 15 percent fall for shares in 888 and a 15 percent gain for Betfair shares.

Bwin said that following Philip Yea's appointment as Chairman elect on April 9, a process to evaluate the performance and structure of the board had begun and that the four nominees would be interviewed to determine their suitability should the review identify any need for change to the board's membership.